ELKHART, Ind., Oct. 25, 2018 /PRNewswire/ -- Patrick Industries, Inc. (NASDAQ: PATK), a major manufacturer and distributor of component and building products for the recreational vehicle ("RV"), marine, manufactured housing ("MH"), and industrial markets, today reported its financial results for the third quarter and nine months ended September 30, 2018.

Third Quarter 2018 Financial Results

Net sales for the third quarter of 2018 increased $167.6 million or 41%, to $575.1 million from $407.5 million in the same quarter of 2017. The increase was attributable to industry growth in the marine, MH and industrial markets, acquisitions, geographic and product expansion efforts, and market share gains. The Company's revenues from the RV industry, which represented 62% of third quarter 2018 sales, increased 30% despite a decrease in RV industry wholesale unit shipments, as estimated by the Company, of approximately 12% compared to the prior year. Revenues from the marine industry, which represented 14% of third quarter 2018 sales, increased 138% over the third quarter of 2017 off of an increase in marine powerboat retail shipments of approximately 4%. Revenues from the MH industry, which represented 12% of third quarter 2018 sales, increased 28% compared to the prior year period with an increase in MH wholesale unit shipments, as estimated by the Company, of approximately 9% from the third quarter of 2017. Revenues from the industrial market, which accounted for 12% of the Company's third quarter 2018 sales and is tied primarily to residential housing, commercial construction, hospitality, and institutional furniture markets, increased 53% compared to the prior year. New housing starts increased approximately 4% in the third quarter of 2018 compared to the prior year.

For the third quarter of 2018, Patrick reported operating income of $44.7 million, an increase of 48% or $14.5 million, from $30.2 million reported in the third quarter of 2017. Net income in the third quarter of 2018 increased 56% to $27.9 million from $17.9 million in the third quarter of 2017, and net income per diluted share increased 60% to $1.15 from $0.72.

Todd Cleveland, Chairman and Chief Executive Officer, said, "We are pleased with our overall operating and financial results in the third quarter which reflect strong operating execution within each of our end-markets and the continued realization of synergies related to acquired companies. During the third quarter, we completed the acquisition of Engineered Metals and Composites, another marine component supplier, marking our eighth acquisition overall this year. Our team remains focused on operational improvement, driving our disciplined strategic agenda, and re-investing in the business for long-term growth."

Net sales for the first nine months of 2018 increased $571.8 million or 49%, to $1.7 billion from $1.2 billion in the same period of 2017. The Company's revenues from the RV industry, which represented 65% of nine months 2018 sales, increased 41% on RV industry wholesale unit shipments that were flat, as estimated by the Company, compared to the prior year. The Company's sales from the marine industry, which represented 11% of nine months 2018 sales, increased 153% compared to the prior year on industry powerboat retail shipments that increased approximately 2%. Revenues from the MH industry, which represented 12% of the Company's nine months 2018 sales, rose 35% compared to the prior year on industry wholesale unit shipments that increased approximately 9%, as estimated by the Company. Revenues from the industrial market, which accounted for 12% of nine months 2018 sales, increased 58% compared to the prior year while new housing starts increased approximately 6% in the same period.

The Company's RV content per unit (on a trailing twelve-month basis) for the third quarter of 2018 increased approximately 36% to an estimated $2,881 from $2,123 for the third quarter of 2017. The marine content per retail unit (on a trailing twelve-month basis) for the third quarter of 2018 increased approximately 152% to an estimated $1,058 from $420 for the third quarter of 2017. The MH content per unit (on a trailing twelve-month basis) for the third quarter of 2018 increased approximately 22% to an estimated $2,632 from $2,159 for the third quarter of 2017.

For the first nine months of 2018, Patrick reported operating income of $139.5 million, an increase of $51.7 million or 59%, from the $87.8 million reported in the first nine months of 2017. Net income in the first nine months of 2018 increased 64% to $92.9 million from $56.7 million in the first nine months of 2017, while net income per diluted share increased 63% to $3.77 from $2.32.

Patrick's total assets increased $352.5 million to $1.2 billion at September 30, 2018, from $866.6 million at December 31, 2017, primarily reflecting the addition of acquisition-related assets and overall growth. The Company invested $391.2 million, in the aggregate, in the first nine months of 2018 for acquisitions, stock repurchases, and capital expenditures.

On October 22, 2018, the Company's Board of Directors authorized an increase in the amount of the Company's common stock that may be acquired over the next 24 months under the current stock repurchase program to $50.0 million, including the $3.6 million remaining under the previous authorization. Year-to-date through October 24, 2018, the Company repurchased 1,505,429 shares at an average price of $58.37 per share for a total cost of $87.9 million.

"We believe the discipline in the RV industry and benefits associated with the expected return to a more normalized seasonal pattern of RV wholesale production, in combination with the growth expectations in the marine, MH and industrial market sectors, will afford us the opportunity to continue to optimize our workforce and plant performance, and drive growth and value through the disciplined execution of our strategic growth plan and capital allocation strategy," Mr. Nemeth stated.

"We continue to have a favorable outlook on all of our primary end-markets based on strong fundamentals and solid retail demand," Mr. Cleveland stated. "As we look ahead to the remainder of 2018 and into 2019, we believe in the ongoing appeal of the outdoor, leisure family-oriented lifestyle that continues to attract new consumers and repeat buyers in both the RV and marine markets, while continuing to expect strong demand in the housing and industrial markets. Our strong operational and financial foundation and the exceptional commitment and dedication of our 8,000+ team members position us to outperform our end-markets, deliver growth on both the top and bottom line, drive shareholder value, and exceed our customers' expectations."

Conference Call Webcast

As previously announced, Patrick Industries will host an online webcast of its third quarter 2018 earnings conference call that can be accessed on the Company's website, www.patrickind.com, under "Investor Relations," on Thursday, October 25, 2018 at 10:00 a.m. Eastern time.

This press release contains certain statements related to future results, our intentions, beliefs and expectations or predictions for the future, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: the impact of any economic downturns especially in the residential housing market, a decline in consumer confidence levels, pricing pressures due to competition, costs and availability of raw materials and commodities, the imposition of restrictions and taxes on imports of raw materials and components used in our products, information technology performance and security, the availability of commercial credit, the availability of retail and wholesale financing for residential and manufactured homes, the availability and costs of labor, inventory levels of retailers and manufacturers, the financial condition of our customers, retention and concentration of significant customers, the ability to generate cash flow or obtain financing to fund growth, future growth rates in the Company's core businesses, the seasonality and cyclicality in the industries to which our products are sold, realization and impact of efficiency improvements and cost reductions, the successful integration of acquisitions and other growth initiatives, increases in interest rates and oil and gasoline prices, adverse weather conditions impacting retail sales, our ability to remain in compliance with our credit agreement covenants, and general economic, market and political conditions. In addition, national and regional economic conditions may affect the retail sale of recreational vehicles and residential and manufactured housing. The Company does not undertake to update forward-looking statements, except as required by law. Further information regarding these and other risks, uncertainties and factors is contained in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, and in the Company's Form 10-Qs for subsequent quarterly periods, which are filed with the Securities and Exchange Commission ("SEC") and are available on the SEC's website at www.sec.gov.

PATRICK INDUSTRIES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

Third Quarter Ended

Nine Months Ended

(thousands except per share data)

Sept. 30, 2018

Sept. 24, 2017

Sept. 30, 2018

Sept. 24, 2017

NET SALES

$

575,139

$

407,511

$

1,731,850

$

1,160,083

Cost of goods sold

468,484

338,328

1,412,649

961,851

GROSS PROFIT

106,655

69,183

319,201

198,232

Operating Expenses:

Warehouse and delivery

19,789

11,016

55,540

32,442

Selling, general and administrative

33,284

22,756

98,999

63,755

Amortization of intangible assets

8,873

5,237

25,140

14,239

Total operating expenses

61,946

39,009

179,679

110,436

OPERATING INCOME

44,709

30,174

139,522

87,796

Interest expense, net

7,338

2,135

17,980

6,159

Income before income taxes

37,371

28,039

121,542

81,637

Income taxes

9,437

10,094

28,680

24,965

NET INCOME

$

27,934

$

17,945

$

92,862

$

56,672

BASIC NET INCOME PER COMMON SHARE (1)

$

1.17

$

0.73

$

3.82

$

2.35

DILUTED NET INCOME PER COMMON SHARE (1)

$

1.15

$

0.72

$

3.77

$

2.32

Weighted average shares outstanding - Basic (1)

23,894

24,663

24,279

24,066

Weighted average shares outstanding - Diluted (1)

24,232

25,032

24,619

24,476

(1) Net income per common share and weighted average shares outstanding, on both a basic and diluted basis, for the third quarter and nine months ended September 24, 2017, have been retroactively adjusted to reflect the impact of the three-for-two stock split paid on December 8, 2017.

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Patrick Industries Inc.

"This audio event contains certain statements related to future results, our intentions, beliefs and expectations or predictions for the future, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Potential factors that could impact results include: the impact of any economic downturns especially in the residential housing market, a decline in consumer confidence levels, pricing pressures due to competition, costs and availability of raw materials and commodities, the imposition of restrictions and taxes on imports of raw materials and components used in our products, information technology performance and security, the availability of commercial credit, the availability of retail and wholesale financing for residential and manufactured homes, the availability and costs of labor, inventory levels of retailers and manufacturers, the financial condition of our customers, retention and concentration of significant customers, the ability to generate cash flow or obtain financing to fund growth, future growth rates in the Company's core businesses, the seasonality and cyclicality in the industries to which our products are sold, realization and impact of efficiency improvements and cost reductions, the successful integration of acquisitions and other growth initiatives, increases in interest rates and oil and gasoline prices, adverse weather conditions impacting retail sales, our ability to remain in compliance with our credit agreement covenants, and general economic, market and political conditions. In addition, national and regional economic conditions may affect the retail sale of recreational vehicles and residential and manufactured housing. The Company does not undertake to update forward-looking statements, except as required by law. Further information regarding these and other risks, uncertainties and factors is contained in the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2017, and in the Company's Form 10-Qs for subsequent quarterly periods, which are filed with the Securities and Exchange Commission ("SEC") and are available on the SEC's website at www.sec.gov. "